Monday, September 19, 2011

Spot gold surge ro record high of $1,878 an ounce for a third consecutive session on Monday. Heck, when was the last time the gold ever did a serious pullback? You can actually bet last penny that the gold will hit $2,000 an ounce, easily and surely. The U.S. economy is in a mess (again) without anybody knowing if it could get any better by next year. And the Europe is not doing anything positive that could at least tell the world the recession, if it’s around the corner, is only confined within the United States. Now, people are waiting for signs of further stimulus from the Federal Reserve then they meet at Wyoming late this week.
With the triple digits up and down from the Dow Jones, many prefer to “do nothing” instead of betting in the stock market. If you really wish to trade, it seems the chances of making money is betting along with the bear so it’s put options or short the stocks all the way. Those who have been reading FinanceTwitter since many moons ago know that besides stocks, I also invest in gold. I’ve written, back in May 2008, that I had been buying gold in the form of jewellery since 2003 (read here). And back in May 2008, the gold was traded at about $920 – $930 an ounce.
Late last year, Nov 2010, I wrote the gold skyrocket to above $1,400 an ounce (read here) and you should diversify by taking the cue from George Soros. Today, the gold price is at mind-boggling $1,878 an ounce. In short, “my gold” has doubled in value since 2008 and if you happened to invest $500,000 in gold 3 years ago, your investment is now worth a cool $1 million bucks, literally speaking. Well, even Venezuela, with world’s 15th largest holder of gold, with 403 tons worth over $20 billion of which 365.7 tons are held overseas (largely in London), ordered its gold reserves to be returned to Caracas.
Gold traders and logistics specialists said the transfer of 211 tonnes of Venezuela gold would represent one of the largest moves of physical gold in decades and could take up to 40 shipments. It was a tactical move by President Hugo Chávez after he witnessed how Libya and Iran were subject to international sanctions after war broke in the countries. Surely Chávez wouldn’t want to see his country’s gold get frozen in the hostile countries, just in case. Of course the question now is whether these overseas vaults supposedly holding Venezuela central bank’s gold still have all the golds.
In a scenario these gold couldn’t be delivered, all hell will break loose as rumours and speculations would surely push up the global gold prices. Now, let’s take a look at the countries (or funds) that have the biggest gold reserves.

4) European Central Bank

5) India

Gold Reserves: World’s 11th largestValue of reserves: $31.47 billion (8.7% of total foreign reserves)Holdings total: 614.6 tons
Indian Government probably did the country proud with one of its best investments - bought 200 tons of gold worth $6.9 billion in Nov 2009 from IMF (International Monetary Fund).